Arcos Dorados reports Q3 EPS 17c, consensus 16c

Reports Q3 revenue $1.1B, consensus $1.12B. Systemwide comparable sales1 grew 32.1% year-over-year, with positive average check and guest volume contributing to the result. Digital channel sales from Mobile App, Delivery and Self-order Kiosks rose 16% versus the prior year period and represented 58% of systemwide sales in third quarter. Third quarter 2024 results demonstrate the resilience of Arcos Dorados (ARCO)’ business model. Sales and profitability were strong, as US dollar revenue set a new high for a third quarter and Adjusted EBITDA was the second highest for a third quarter. Notably, comparable guest counts rose for the 14th consecutive quarter, with broad-based traffic increases in the region. This helped drive systemwide comp sales growth in all three divisions, despite more challenging economic and consumer environments. “Our strategy, built around Digital, Delivery and Drive-thru, remained an unmatched structural competitive advantage across all markets. In line with McDonald’s global growth strategy, we expect our restaurant opening pipeline to unlock even more shareholder value, as we capture the significant expansion opportunity over the next several years. Our balance sheet is as strong as ever, which allows us to continue ramping up on the Fourth “D” of our strategy: Development. With that in mind, moving forward, we will begin referring to our Four D’s Strategy…. we believe we are operating in the world’s best ZIP code. Latin America has one of the globe’s most underpenetrated QSR industries. While it is true we have political and economic cycles, we are the least impacted emerging market when it comes to the serious geopolitical issues in other parts of the world. And, the consumer class continues to grow in Latin America’s biggest markets, which will generate growing demand for the world’s most popular QSR Brand. It will be our job to capitalize on these opportunities in the years to come.”